IPSE responds to HMRC IR35 private sector consultation

The government has launched an open consultation on the IR35 private sector reforms set to take place next year.

HMRC says that the consultation ‘seeks to ensure the proposed processes are suitable for the large and diverse private sector as well as engagers in the public sector already applying the rules’.

It also sets out how businesses can prepare for the reform, explaining HMRC’s plans to provide education and support for firms that will be in scope of the changes.

However, the Association of Independent Professionals and the Self-Employed (IPSE) warns about the dire risks of the IR35 changes and the serious harm it will cause to the self-employed.

IPSE’s Deputy Director of Policy Andy Chamberlain, explains, “This is an astonishingly myopic move. The UK’s greatest competitive advantage is its flexible labour market. This proposal will dramatically restrict that flexibility and starve UK businesses of the freelance talent they need to get work done.

“Pushing ahead with this during Brexit will hamstring freelancers and their clients when the country needs them most.

“HMRC has claimed pushing these changes into the public sector generated £550 million, but this is at the cost of far-reaching long-term damage.

“In the NHS, TfL and right across the public sector, the changes led to mass contractor walkouts, causing disruption, staff shortages and even the cancellation of major projects.

“Brexit uncertainty has already driven freelancers’ confidence to an all-time low: the last thing they need now is heavy-handed legislation suffocating their sector.

“IPSE, the CBI and numerous other business bodies have already warned about the dire risks of the reforms – and we will do so again in this consultation. The government should finally open its ears to the experts and scrap the dangerous reforms to IR35 once and for all.”

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